Can TDY workers deduct expenses to travel home?

[jgombos]

What is the name of your state? IN

Suppose a worker on temporary duty ("TDY") is getting tax-free per diem Monday-Friday, but no per diem on the weekend. They rent a Cessna for ~$400 round trip to visit home for the weekend. I want to know how much of that expense is tax deductible, if any.

I read section 1.32.1.2.1 of http://www.irs.gov/irm/part1/ch20s01.html, and my interpretation was that the Cessna rental is deductible, but capped at the amount of per diem the worker would have been eligible for had they not traveled home. So if per diem is $150, they can deduct $300 of their weekend Cessna rental; correct?

Does anyone agree or disagree?

 

[JETX]

So if per diem is $150, they can deduct $300 of their weekend Cessna rental; correct?

Does anyone agree or disagree?

Disagree. The problem here is your agreement is NO per diem on the weekends... so the weekend expense is deductible (if at all) only to the amount of your per diem... which is ZERO.

 

[jgombos]

I just read the following paragraph from http://www.irs.gov/publications/p17/ch26.html#d0e59938:

Going home on days off. If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. You cannot deduct the cost of your meals and lodging there. However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work.

If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work.

This text seems to imply that the cap is based off the amount of per diem the worker would be eligible for, as opposed to the amount of per diem that they actually received. It's confusing, because in this case the employer is not actually paying the full amount of per diem the worker is eligable for. The worker is sufficiently far from their tax home (~300 miles away) to remain in the temporary location on the weekends - and is thus eligible for 7 days of per diem. The employer is simply choosing not to pay weekend per diem because they have no way of knowing at the time the contract is established whether the worker will go home for the weekend.

It does not seem reasonable that the employers choice not to pay per diem on weekends should have any effect on the employees deductions. Some employers will pay more per diem than others for the same given situation. I'm expecting those differences to all work out the same when the tax year has ended and the employee is filing. Is that not the case?